The Housing Question No 5: The safety net is under threat

Temporary accommodation, leasehold reform, Britain's Housing Crisis, Wendy Wilson

Welcome to the fifth issue of The Housing Question, my newsletter covering everything to do with housing. Or rather welcome back. After a prolonged hiatus, I’m back on a more regular basis with some thoughts on what’s been catching my attention in the last week. The Housing Question is still a work in progress but let me know what you think and please consider subscribing and sharing on social media if you like what you read.

When temporary becomes permanent

Think of the number of homeless families stuck in temporary accommodation in England and you tend to think first of London. London Councils estimates that 170,000 people – one in 50 Londoners – are in precisely that situation. Daniel Hewitt of ITV News reported this week on the consequences of this for two families on different sides of London.

In this context, ‘temporary’ can mean for years and ‘accommodation’ can mean a room in a Travelodge or bed and breakfast with your kids. There is a six-week legal limit on how long the latter can last for families with children but the numbers going beyond it have more than doubled in the last 12 months. Ministers have repeatedly warned councils about breaking the legal limit while doing little to help and leaving them to pick up much of the bill.

English councils have spent £1.7 billion in the last 12 months on all forms of temporary accommodation - but this is not just a London or even a big city problem. More than 150 district councils, which would once have been mostly Conservative controlled, attended a virtual summit hosted by Eastbourne District Council this week. Eastbourne’s leader Stephen Holt warned that: ‘The collapse of support for society's most vulnerable people is now a reality for many, unless the government urgently intervenes.’ Over in Hastings, costs have soared from £170,000 in 2019 to an expected £5.6 million this year – a third of its net budget – and the council’s leader warns that it could become effectively insolvent.

Members of the District Councils Network attending the summit were invited to sign an open letter to chancellor Jeremy Hunt warning that ‘without urgent intervention, the existence of our safety net is under threat’. Ahead of the Autumn Statement they are calling for an end to the freeze on Local Housing Allowance and long-term investment in social housing as well as top-ups to emergency housing funds and action to stimulate supply in the private rented sector.

The temporary accommodation problem has become a crisis once again (see below). It has never really gone away but it can be tackled. Concerted action by the Labour government in the 2000s delivered a big reduction in the numbers affected by 2010 but they have doubled since. Thinking of London, that’s where the solutions lie too.

Housing crisis? What housing crisis?

My latest column for Inside Housing reviews a new BBC TV documentary on housing that tells a compelling story of what’s gone wrong over the last two decades via a top cast of interviewees including ministers, special advisers and campaigners.

There is much that is good about Britain’s Housing Crisis: What Went Wrong? and I particularly liked the way that it revealed the links across different tenures and between housing and developments in the wider economy such as financialisation and quantitative easing.

But the editing left me wondering. Why just cover the last two decades and start in 1997? That leaves out key parts of the story from the right to buy to the liberalisation of mortgage finance to the creation of Buy to Let. It also means that the story begins at a time of relatively affordable house prices thanks to the housing market crash of the early 1990s. Social housing only appears in the middle of the second episode and there are few mentions of homelessness and temporary accommodation and none of the long-term impacts on inheritance and inequality within and between generations. I thought it could have done with a third episode on how to put things right that could have looked beyond its assumption that building more homes for sale will be enough on its own.

Another assumption is that a villainous minority – landlords, housebuilders, multiple property owners – have benefitted at the expense of the majority. That misses out a major beneficiary of unaffordable house prices: us, or rather the majority of us lucky enough to buy at the right time (read The Observer’s extract from Rowan Moore’s new book Property for an account of that).

So the programme only reinforced the thinking that lay behind the creation of this newsletter. The notion of a ‘housing crisis’ does not fit a story about ‘how a dream was destroyed by two decades of political and economic failure’? A crisis can be defined as a period of intense difficulty or danger or a time when a difficult decision must be made or (in medical usage) the turning point in a disease. It is usually short term and an indication that something had gone wrong with the established order. A systemic failure over two decades (and I’d argue longer than that) looks less like a crisis than a design feature of our political economy.

The idea of crisis has become so ubiquitous in our culture that we have to invent terms like permacrisis and polycrisis to explain that ubiquity. In housing we can see crises all around us, in everything from rising homelessness to surging mortgage rates to building safety to the struggle to find somewhere to rent. The impact of these crises will be felt differently across regions, age brackets and income groups. Shelter’s idea of a ‘housing emergency’ – and as just declared by Edinburgh City Council – expresses this a bit better. By contrast, the notion of a single ‘housing crisis’ privileges certain solutions (which almost always involve fixing the market by making it work better) over others with the potential to answer what is a more fundamental housing question.

The end of leasehold – but not quite yet

In what looks like a victory for Michael Gove and the housing department after months of wrangling with Downing Street, next week’s King’s Speech will include a Leasehold Reform Bill.

As trailed in The Sunday Times and confirmed by housing minister Rachel Maclean, the Bill will include reforms that will mean significant changes for new and existing leaseholders alike.

The fact that the Bill is appearing at all is good news given the temptation to put a contentious piece of legislation in the ‘too difficult’ tray in the year before a general election. Against that, doing nothing and pissing off 10 million voters did not look like a great option either.

The details remain to be seen and I’ll come back to them after the King’s Speech but it already seems clear that the Bill will fall some way short of what Gove himself has signalled in the past. As he put it in June 2022: ‘It is absolutely right that we end this absurd, feudal system of leasehold, which restricts people’s property rights in a way that is indefensible in the 21st century.’

Attempts to reform leasehold have been going on since the 19th century but, consistent with reports six months ago that Gove had lost the battle for a ‘maximalist’ Bill, it seems England and Wales will have to wait a while longer to end it and no longer be the odd ones out around the world.

Perhaps the least significant of the changes is the one that makes the Sunday Times headline: a ban on new leasehold houses was first promised six and a half years ago in the wake of the scandal over exploitation by greedy housebuilders and very few are now built. There seems to be no plan to ban new leasehold flats, though, despite the continuing building safety crisis.

For existing leaseholders, there is good news in the shape of plans to make it easier and quicker to extend a lease and to make the default extension 990 years rather than 90. Less good is that there is no mention of tackling issues like service charges and estate management charges.

Potentially the most far-reaching change comes in a consultation on cap all ground rents at a peppercorn rent. But this is just a consultation and the government seems sure to face extensive lobbying and threats of legal action from freeholder interests.

So perhaps the best news for the moment (for the signal it sends that ministers are serious as well as in itself) is the government’s decision to appoint the leasehold campaigner Martin Boyd as the new chair of the Leasehold Advisory Service. The new message seems clear:

https://twitter.com/martinboydlkp/status/1719637960499360150

Badge of honour

This week sees the retirement of Wendy Wilson, head of the social policy section in the House of Commons Library. For as long as I can remember, her briefings on the big housing issues and legislation going through the House have been essential reading in their own right and an essential source of reference for anyone wanting to check their facts.

In a world where the loudest opinions get the most clicks and alternative facts can be invented as required, her work counted for so much. If anyone has done more to inform and explain when it comes to housing I have yet to come across them. Have a well deserved and very happy retirement, Wendy – and sign me up as a member.

On my reading list

Can my landlord prevent me from keeping a pet? (England)

Can private landlords refuse to let to benefit claimants and people with children?

Two typically lucid Commons Library briefings by Wendy Wilson published this week. The first is addressed in the Renters (Reform) Reform Bill, the second is unexpectedly not mentioned despite a promise by the housing minister four years ago to ban ‘no DSS’ adverts.

Canadian lessons on appealing to the young for Britain’s Tories

As Tory support among the under-30s slumps to single figures, John Burn-Murdoch’s latest FT piece highlights how Canadian Conservatives have regained support by becoming the party of housebuilding but UK Tories risk ceding that to Labour. I can’t help but remember the pre-2010 UK Conservatives looking at the way their Canadian counterparts ended all federal subsidy for social housing and (almost) followed suit.

If you’ve enjoyed this post, please share it and consider subscribing. Enjoy the weekend and I’ll be back soon.